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Type Working Paper - SALDRU Working Paper Number 188/NIDS Discussion Paper 2016/15
Title Vulnerability and the middle class in South Africa
Issue 188/15
Publication (Day/Month/Year) 2016
Page numbers 1-42
In this paper, we attempt to develop a conceptually and empirically rigorous approach to defining and measuring the middle class in South Africa. Arguing that the notion of ‘empowerment’ is central to the social and political meanings of ‘middle class’, we propose an empirical strategy that uses (in)vulnerability to poverty as the key criterion defining middle classs tatus. Using the panel dimension of the nationally representative National Income Dynamics Study (NIDS), we present a probability model that predicts the risk of staying in or falling into poverty over a six-year time frame, depending on a broad array of initial household conditions and resources. We select the expenditure level associated with a maximum risk to poverty of 10 percent as the lower bound of the middle class and the expenditure level associated with effective invulnerability to poverty as the upper bound. This gives us a monthly per capita expenditure range of R3,104 to R10,387 (January 2015 prices). Using these thresholds, we find that the middle class in South Africa is smaller than previous research has suggested (with a population share of about 13.5 percent in 2014), and has grown sluggishly since 1993. Despite this, there has been considerable demographic transformation within the middle class, with Africans now outnumbering whites by a significant margin. 

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